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Research area

Energy and environmental economics

Research in this area explores efficient design of climate and energy policy, electricity, oil and gas markets, and indicators
of sustainable growth with a view to generating new knowledge on the management of energy and environmental resources. Climate
policy studies address, i.a., the interplay of policy making, technological progress, international climate negotiations and
permit markets. Energy market research studies the demand for electric power, oil and gas over time. Sustainable growth requires
improved indicators and studies of the resources and environment of the Arctic.

Research fields

Research in this field includes studies of climate policy and alternative formulations of international treaties and national
policies. Instruments studied include taxes on emissions, emissions trading schemes, green and white certificates, investments
under the green development mechanism CDM, technology development incentives and strategies to increase the support to international
climate treaties.

Research in this area addresses aspects related to supply, demand, efficiency and distribution in the markets for power, oil
and gas. Key research themes include household energy demand, power market response to demand, and impact of changing climate
and energy policy.

Research here seeks to describe how issues such as the cost of power, income, housing and household characteristics, energy
consuming appliances affect household energy consumption. Studies aim to shed light on energy consumption growth; forecast
energy use based on current policy, and evaluate the impact of various policy measures.

Research in this area addresses the need for deeper insight into how the oil and gas markets are affected by the regulatory
environment and leading market players. Issues of concern here include exercise of market power, dynamic optimisation of non-renewable
resources, and the impact of climate policy. Theoretical analyses and large-scale simulation models are used in this research
field.

Research here includes analytical studies of power markets at Norwegian, Nordic, European and global levels. Themes of interest
are, i.a., the impact of taxes, subsidies, green certificates and market power. Work is also done on carbon capture and storage
(CCS). Large-scale simulation models are important tools in this field of study.

Research seeks to refine sustainable development indicators at Statistics Norway. Their aim is to give early warning of impending
hazards and urgency of action. A new project studies how to introduce precautionary principles to sustainable development
analyses of uncertain but potentially threatening environmental hazards.

Technological development is a prerequisite for the realization of key environmental and energy policy objectives, combined
with continued economic growth. Research in this field analyses the forces that influence technological development and economic
growth, and how policy instruments can be designed to affect innovation and diffusion of new technologies, for general as
well as environmental and energy technologies.

The European Union (EU) identified some positive and negative externalities related to energy production and consumption when
adopting its Renewable Energy and Climate Change Package. Given these externalities, Cathrine Hagem derives in a new Discussion
Paper the optimal combination of policy instruments. Thereafter, she explores the second-best outcome, given constraints on
the use of some policy instruments, due to political considerations and international regulations.

In the longer run, effects on R&D and the implementation of advanced abatement technology may be at least as important as
short-run cost effectiveness when we evaluate public environmental policy. Halvor Briseid Storrøsten's Discussion Paper shows
that the number of firms that adopt advanced abatement technology could be higher with emissions trading than with a tax if
there is imperfect competition in the permits market.

In a new Discussion Paper Annegrete Bruvoll discusses the distinctions between the Pigouvian and the fiscal taxes in light
of tax theory. The revenues following the Eurostat et al. statistical basis deviate significantly from the revenues from the
environmental taxes defined on the basis of theory. Steps should be taken to harmonize the international statistics of environmental
taxes with economic tax theory.

By studying the market effects of green certificates, Torstein Bye and Michael Hoel show that the effect will not be anything
like that anticipated, neither for the energy market nor for the climate. They conclude that the certificates are expensive
and pointless renewable fun.

The Economy of the North 2008 presents a comprehensive overview of the economy of the circumpolar Arctic, including the traditional production activities
of the indigenous people. The report discusses the importance of the Arctic economy from a global perspective, with particular
focus on the natural resources in the Arctic region.